consumption Flashcards

1
Q

consumption

A

total expenditure by households on goods and services over a period of time

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2
Q

durable goods

A

goods consumed over a long period of time

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3
Q

non-durable goods

A

goods consumed almost immediately

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4
Q

saving

A

portion of households’ disposable income which isn’t spent over a period of time

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5
Q

disposable income

A

household income over a period of time
includes state benefits + less direct taxes

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6
Q

consumption function

A

relationship between consumption of households and the factors that determine it

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7
Q

marginal propensity to consume (MPS)

A

proportion of a change in income that is spent

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8
Q

MPC equation

A

change in C / change in Y

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9
Q

average propensity to consume (APS)

A

proportion of total income spent

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10
Q

APS equation

A

C/Y

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11
Q

wealth effect

A

change in consumption following a change in wealth

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12
Q

savings function

A

relationship between the saving of households and the factors which determine it

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13
Q

average propensity to save

A

proportion of total income saved
S/Y

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14
Q

marginal propensity to save

A

proportion of a change in income that is saved
change in S / change in Y

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